Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

This paper examines whether researchers take technological progress into account when modeling aggregate energy demand or not. The time trend as a proxy variable of technological progress is crucial in this debate. The model selection procedures are applied to energy consumption in term of six different model specifications. ADL model with time trend is found to give the most satisfactory results by LR test. The results indicate that the income elasticity is significant, but the magnitude of that is more than unity while the price elasticity is insignificant. In addition, the paper briefly discusses the explanations and problems of these findings.